My new work in progress is set in a small town in Idaho. I'm basing some of the location on memories I had as a kid visiting my grandparents, but some of it is made up. Still I find myself researching the town and neighboring towns so that the things that I'm writing about are plausible. Every time I have a question, I pull up Google maps, look at the layout, see the pictures, and think about the things we used to do. It's been close to 25 years since i visited on a regular basis, but I can still remember certain parts of the town, like the pool and the park.
Other parts are a bit blurry, but still there, like shopping downtown or the very small "mall." The town itself isn't really a character, but it does affect how one of my characters grew up, and it influences some of the decisions that they make now.
How does your setting play into your story?